Finance Minister Nirmala Sitharaman is set to unveil the much-anticipated NPS Vatsalya scheme tomorrow, an initiative introduced in the Union Budget 2024-25. The scheme aims to help parents invest in pension accounts for their children, fostering long-term wealth growth through compounding.
What Is the NPS Vatsalya Scheme?
The NPS Vatsalya scheme allows parents and guardians to open pension accounts for minors, promoting early financial planning. With flexible contribution options, families can begin with a minimum annual investment of Rs 1,000, making it accessible across different economic strata. Once the child turns 18, the account seamlessly converts into a regular National Pension System (NPS) account.
Finance Minister Sitharaman will also launch an online platform for subscribing to the scheme, distribute Permanent Retirement Account Number (PRAN) cards to minors, and release an official brochure during the event.
Who Can Operate the Scheme?
Parents, guardians, NRIs, and OCIs can open NPS Vatsalya accounts on behalf of minors. The scheme mandates a minimum contribution of Rs 500 per month or Rs 6,000 annually, providing significant long-term returns through the power of compounding.
Simultaneous launch events will take place across 75 locations nationwide, with PRAN cards distributed to new minor subscribers. Many of these events will be connected via video conference.
Administered by the Pension Fund Regulatory and Development Authority (PFRDA), NPS Vatsalya is designed to secure the financial future of India’s younger generation, promoting early retirement savings and long-term financial independence.
The Finance Ministry emphasized that this initiative is part of the government’s broader commitment to ensuring financial security for future generations.